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Thread: VALERO article

  1. #1
    Aruba since 1979
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    VALERO article

    UPDATE 1-Valero unlikely to sell Aruba refinery - sources

    By Erwin Seba

    HOUSTON, June 4 (Reuters) - Valero Energy Corp (VLO.N) is unlikely to find a buyer for its shuttered 325,000 barrel per day refinery in Aruba after two and a half years of trying, according to sources familiar with the matter.

    San Antonio-based Valero is pursuing talks on forming a joint-venture with Latin American national oil companies in lieu of a sale, the sources said.

    "They say they are looking for a buyer, but they are only talking about joint-venture partners," one of the sources said.

    Even if unable to find a joint-venture partner, Valero would be able to operate the Aruba refinery without losing money, assuming current economic conditions continue, according to the sources.

    Valero said on Thursday it would soon begin a 90-day overhaul of production units at the Aruba refinery, which was shuttered in July 2009, to prepare for a restart.

    Valero spokesman Bill Day said the company was prepared to continue running the refinery alone.

    "Valero continues to explore all options for the Aruba refinery, and an operating refinery may be more attractive to a potential buyer than a shutdown one," Day said.

    The Aruba refinery, which cannot make finished refined products, has been called unattractive by refinery brokers because it would require an investment of hundreds of millions of dollars for it to make finished refined products like gasoline or diesel fuel.

    Prior to shutting the refinery as the recession crushed U.S. consumer demand for motor fuels, Valero used Aruba to make feedstocks that were sent to Gulf Coast and East Coast refineries to be made into finished fuels.

    PDVSA, PETROBRAS AMONG POSSIBLE PARTNERS

    Among the potential joint-venture partners are Venezuela's state-owned oil company Petroleos de Venezuela SA, or PDVSA, Petrobras (PETR4.SA)(PBR.N) of Brazil and Pacific Rubiales (PRE.TO) of Colombia, the sources said.

    Aruba's government, which recently approved the settlement of a tax dispute with Valero, has identified those companies as having engaged in talks to buy the plant.

    One company missing from the joint-venture partner list was PetroChina (0857.HK)(601857.SS), which was touted as a potential buyer of the refinery.

    "They're out of it," one of the sources said about PetroChina.

    Petrobras came close to a purchase of the refinery, but the deal fell through in 2008 after a fire at the plant.

    Valero would not lose money if it simply restarted the refinery, assuming motor fuel demand continues to recover in the United States.

    "They think they can break even," one of the sources said.

    Valero does plan to cut back on salaried employees and contractors at the refinery following the restart, the sources said.

    The refinery's hourly workers are covered by a contract with the United Steelworkers union.

    Valero is the largest independent refiner in the United States. (

  2. #2
    Senior Member Arubalisa's Avatar
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    With U.S. oil drilling on hold perhaps permanently. Valero may be able to once again make a profit with heavy sour crude from Mexico and Venezuela.

  3. #3
    Member cooliecanpro's Avatar
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    Please don't tell BP about this.

  4. #4
    Senior Member Arubalisa's Avatar
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    Today's issue of arubatoday.com has a fairly lenthy article regarding the proposed re-opening of the refinery. For their investment, let's hope the economy strengths so that Valero can go ahead with it's plan.

  5. #5
    Senior Member Arubalisa's Avatar
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    "Valero re-starts refinery
    4 Jun, 2010, 12:07 (GMT -04:00)
    http://www.amigoe.com/artman/publish/artikel_73502.php

    ORANJESTAD — The oil refinery of Valero will be re-started within 90 days. The intended date for complete resumption of the activities is September 1st. Valero will invest 50 million dollars (90 million florins) to realize this.

    Premier Mike Eman (AVP), Minister of Finances, Utilities, Communication and Energy, Mike de Meza (AVP), Valero-director Ray Buckley and Kim Bowers, executive Vice President of the oil concern announced the aforementioned in the Council of Minister yesterday afternoon. The reason given for this so-called turn around was ‘the considerably improved economical situation’. The concluded new tax arrangement for Valero last January and the abolishing of the sales tax on exports, which the parliament had both approved last week, also were of great importance for the re-start, according to Valero and Premier Eman.

    All of the more than 600 co-workers of Valero will remain employed and contract workers will be employed again. This would certainly guarantee thousands of jobs. However, Valero-director Buckley did not wish to elaborate on the question how many contract workers would be employed. The turn around implies that a start will be made with a large-scaled overhaul of the refinery and the implementation of a number of projects so that the refinery will be able to process oil again. For this purpose, the contract workers will be employed as well.

    Valero is thus investing 50 million dollars. After the turn around, the refinery will start to produce the same quantity of barrels (235,000) per day as before the discontinuation one year ago. Both parties emphasize the refinery’s re-start will occur on condition that the price margins for heavy sour crude will not plummet again and there’s no catastrophe. Valero will continue to keep an eye on the price margins after the re-start. “The government has done its part, now it’s up to us to re-start the refinery and make this as efficient as possible. We can manage these two factors ourselves. Whatever happens with the world economy, that’s not in our own hands”, says Kim Bowers. Nevertheless, Eman remains optimistic. “I think that the new tax arrangement, the fact that the sales tax was abolished and the knowledge with Valero that this government is exactly there to help, will lead to consistency with the refinery’s operation, also with financial setbacks.”

    Still no partner
    The search for ‘strategic partners’ to keep the refinery running, will continue. At first, there was the rumor that the Venezuelan PdVSA would be involved with the re-start. During the press conference, Valero-director Ray Buckley indicated there were conversations with several parties. “However, our policy is not to mention any names.” Later on, Eman stated before this newspaper that Petrobras, Pemex and in particular PdVSA and the combination Pacific Rubiales/Ecopetrol were interested in the refinery."

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